A governor of the American central bank (Fed) estimated on Tuesday that it would undoubtedly be necessary to raise rates further to bring inflation back on track in the United States, but another governor of this institution nevertheless showed a little more optimistic.
My economic forecast still calls for having to raise rates further to maintain policy tight enough to bring inflation back to our 2% target in due time, Fed Governor Michelle Bowman said at a Salt Lake City conference. (Utah).
The Fed’s preferred inflation measure, the PCE index, will be published on Thursday for the month of October. The CPI index, published earlier in the month, showed a sharp drop in inflation last month, 3.2% over one year.
Ms Bowman welcomed significant progress in reducing inflation, without harming the strength of the labor market or economic activity.
But she also noted uncertainties surrounding (her) economic forecasts, which will influence (her) vision of appropriate monetary policy in the future.
The next Fed meeting will take place on December 12 and 13. A maintenance of rates in their current range of 5.25 to 5.50% is mainly expected by market players, according to CME Group estimates.
We do not yet know the full extent of the effects of tighter monetary policy and financial conditions on economic activity and inflation, Bowman said.
Another Fed governor, Christopher Waller, speaking Tuesday to business leaders in Washington, said he was increasingly convinced that the policy is now well positioned to slow the economy and bring inflation back. %.
But he also highlighted great uncertainties (which) remain regarding the pace of future activity.
So I can’t say with certainty whether (the Fed) has done enough to achieve price stability, he warned.
He said he was encouraged by the first signs of moderation in economic activity in the fourth quarter, but noted that inflation remains too high and it is too early to tell whether the slowdown we are seeing will be lasting.